Known as “prenup”, a prenuptial agreement is a contract on paper created and signed by two individuals before they marry each other. This document enumerates the assets and liabilities of each person. It also breaks down the property rights of each when the marriage ends.

Some states call the prenup an antenuptial agreement or a premarital agreement. The contract of the same nature made while the couple is still married is called postmarital, marital, or postnuptial agreement.

Uses of a Prenup

Many people think that prenups are only for rich people. The truth is that this kind of document has the following uses:
• Clarify your rights to finances
• Pass on the individual property to kids from past marriages
• Obtain debt protection
• Prevent arguments in case divorce sets in

When should the couple make and sign the prenup? What if the couple’s relationship is already veering towards divorce? Is it too late to sign the agreement?

Bezos V MacKenzie

Back in 1993, Jeff Bezos was wed to MacKenzie Tuttle. Back then, he was a successful employee at D.E. Shaw & Co. hedge fund. A year later, Bezos launched Amazon. Now, Amazon is a company worth trillions of dollars. Bezos’ total net worth has grown about 150 Billion USD. Then, the announcement came—Bezos and MacKenzie are getting divorced.
Bezos was wondering if his company or net worth will be affected significantly by the divorce. He also asked if it was too late to late for them to sign a prenup.

Before the Chaos

Since it is a prenuptial agreement, it is a document that must be accomplished before nuptials. Once the wedding ceremony is done, it’s already too late to sign the prenup. The only question left to ask is what happens if you don’t have one.

Bezos and MacKenzie still live near Seattle. Based on Washington’s marital property laws, the couple owns together almost all the property they acquired during their marriage. When the marriage ends, all their properties will be divided equally, once they divorce.

The joint properties concerned are the following:

• Properties acquired with the use of community funds
• Earnings the spouses earned independently during the marriage (includes retirement benefits, investment interests, or capital gains)
• Properties acquired with the earnings during the marriage

The properties in question include Bezo’s interest in Amazon and everything he bought with the income from running Amazon. After the founding of Amazon back in 1994, she did the accounting for Amazon. According to Reuters, Bezos credited his wife for supporting him during the company’s launch. Even if MacKenzie doesn’t have any shares of stocks in Amazon, she could be entitled to half of her husband’s stocks in the company. The said stake is 16.1%, equivalent to 130 Billion USD.

If they signed a valid prenuptial agreement, MacKenzie might have limited access to Jeff’s assets.

Finality

If there is no prenup or postnup, a 50/50 split would be fair. A postnuptial agreement is rarer than prenups but it can definitely settle issues on debts, finances, and assets. Presently, it is becoming a common choice for divorcing couples. If they talk about it, Bezos and his wife could end up with an agreement from 1993 to the present.

They should create their settlement contract during their divorce because if they don’t, Washington’s community property laws would have to enter the scene.

You could still settle property issues while your marriage is still in effect. Doing so could save you a lot of trouble, especially when it comes to finances. If you think your marriage is on the verge of going through separation and divorce, it is best to talk to each other first and then to an experienced family law attorney.